KARACHI: The Pakistan stock exchange (PSX) plunged a massive 816 points on Monday — a day after the government announced a $6 billion International Monetary Fund (IMF) package — with the benchmark KSE 100 losing 2.3 percent during intra-day trading and cementing fears that investor sentiments remain bleakly uncertain.
For a few minutes when trading opened, all seemed well with upwards activity and a move into the green zone by more than 500 points before the PSX experienced one of the bourse’s worst bearish spells, pushing the index to close below 34,000 points.
“The market opened on a buoyant note before panic-prone investors started to jettison shares,” said Muhammad Faizan, an analyst and head of foreign institutional sales, Next Capital Limited, a brokerage. He said this occurred due to concerns of tough conditions attached with the IMF bailout package, leading to heavy sell-offs in the market that pushed the index to close at 33,900 points.
Pakistani authorities and the IMF team on Sunday reached a staff level agreement on economic policies to be supported by a three-year agreement for about $6 billion which is subject to IMF management approval and to the timely implementation of the Fund’s conditions.
According to Ahsan Mehanti, Chief Executive at Arif Habib Corporation, a capital market company, “Expected increase in taxes and utility prices, sharp fall in expected growth rate, projections for 6.5-7 percent fiscal deficit to GDP, and expected tightening in SBP policy rates played a catalyst role in bearish close.”
With inflation climbing to over 8 percent, the rupee losing a third of its value over the past year, and foreign exchange reserves barely enough to cover two months of exports, Pakistan was forced to turn to the IMF for its 13th bailout package last year.
Outlining critical steps Pakistan needed to take for fiscal strategy, the IMF said the upcoming budget, to be announced this month, would aim for a primary deficit of 0.6 percent of GDP supported by tax policy revenue mobilization measures to eliminate exemptions, curtail special treatments, and improve tax administration.
Economists say that impact of the IMF bailout program and the promises made to secure the money by Pakistani authorities will be reflected in this month’s budget.
“The most prominent thing in the budget would be the imposition of around Rs. 700 billion in new taxes,” according to Dr. Hafeez Pasha, former finance minister, who spoke to Arab News on Monday. “The major portion of taxes will be through the reduction of exemptions being given on many items including medicine, medical equipment and fertilizers,” he said, and added that a removal of the exemptions would hugely affect ordinary citizens.
The IMF has asked that Pakistan’s deficit be reduced to between 1-1.5 percent of GDP, which will mean a deficit of up to Rs. 750 billion will need to be curtailed.
“The problem is that what we pay in debt servicing will have to continue as there is no space for reduction. The fiscal space is available in your defense and development budgets and the choice is yours,” Pasha said.
Some experts do believe that the agreement will boost the confidence of investors and end the long prevailing uncertainty from nine months of IMF negotiations. Others say the bearish rule at the PSX is here to stay.
“The movement of currency will now be based on demand and supply bases. At the month end when debt payment nears, we will see shocks in the currency market,” Muzzamil Aslam, a senior economist told Arab News and called for the strong role of regulator.
“As per the real effective exchange rate, the Pakistani Rupee is close to its equilibrium, and there is only 2-3 percent room for further devaluation,” he said.
The IMF forecasts Pakistan’s economic growth slowing to 2.9% this fiscal year from 5.2% in 2018, while the central bank has cut its estimate to between 3.5-4%.
“If there arises any demand and supply issue and the central bank is not allowed to intervene, then the market can do anything,” Aslam said. “We could see Rs.10 appreciation or depreciation in a single day.”
Tough IMF conditions push Pakistan stocks down 816 points
Tough IMF conditions push Pakistan stocks down 816 points
- The Pakistan Stock Exchange plunged on Monday to lose 2.3% during intra-day trading
- Defense and development are only two areas where there is fiscal space for budget cuts, economists say
Pakistan’s defense minister rejects claim ex-PM Khan being pressurized to accept ‘deal’
- Chairman of Khan’s party this week said cricketer-turned-politician was being kept in jail so he would agree to a “deal” with the government
- Khan, who has been in jail since August last year after multiple convictions, has vowed not to agree to a “deal” with his political adversaries
ISLAMABAD: Pakistan’s Defense Minister Khawaja Muhammad Asif on Thursday rejected claims that former prime minister Imran Khan was being pressurized to accept a “deal” and come to the negotiating table with the government.
Khan, who was prime minister from 2018-2022, remains jailed in multiple cases, including a 14-year jail sentence for him and his wife for the illegal sale of state gifts. Khan fell out with Pakistan’s powerful military after he was ousted from office via a parliamentary vote in Apr. 2022.
Asif was responding to PTI Chairman Barrister Gohar Khan’s interaction with reporters on Tuesday when he said that the way the former prime minister and his wife were being kept in jail, “these are all [forms of] pressure that Khan somehow agrees to a deal.”
Speaking exclusively to Independent Urdu, Asif rejected claims Khan was being pressurized to come to the negotiating table.
“There is no such thing,” Asif said, claiming that PTI leaders were issuing such statements to stay relevant. “That is why these statements are being issued. There is no truth to them.”
Asif said senior members of the PTI had given statements recently rejecting the possibility of a deal with the government.
“Now if their leadership is issuing contradictory statements themselves, then what comment do we give on it,” he said. “I think their contradictory statements are validating our point.”
Khan’s multiple convictions mean he is banned from holding public office and ruled the 71-year-old out of general elections earlier this year. Arguably Pakistan’s most popular politician, Khan says all cases against him are motivated to keep him out of politics.
Elephant Madhubala to be shifted to Karachi’s Safari Park in May— state media
- Madhubala has been in solitary confinement since April 2023 when her companion, elephant Noor Jehan, died
- International animal rights organization warns solitary confinement has taken a toll on Madhubala’s mental health
ISLAMABAD: Pakistani elephant Madhubala, who has been in solitary confinement at Karachi Zoo since last year, will be shifted to Karachi’s Safari Park in May where she will be in the company of two other elephants, state-run media Associated Press of Pakistan reported on Thursday.
Madhubala, one of only three captive elephants alive in Pakistan, was brought to the South Asian country with three other elephants from Tanzania in 2009. However, has been in solitary confinement at Karachi Zoo since April 2023 after her companion, elephant Noor Jehan passed away from illness.
International animal rights organization FOUR PAWS, which has been involved in efforts to have Madhubala relocated to Karachi Safari Park, said last week the solitary confinement has taken a strong toll on her mental condition, with boredom being her biggest stressor.
Animal rights activists have long campaigned against the plight of animals in Pakistan, especially elephants, and demanded they be shifted to “species-appropriate” locations such as the Safari Park.
“According to Zoo administration, the arrangements for the transfer have been completed,” APP said. “Madhubala will join two other elephants, Sonia and Malika after relocation to Safari Park.”
A FOUR PAWS spokesperson said the organization was thrilled to see Madhubala finally getting the treatment she deserves.
“Her story is a testament to the power of collaboration and the importance of animal welfare,” the spokesperson was quoted as saying by APP.
FOUR PAWS says the elephant enclosures at Safari Park would have water elements for bathing, skincare and thermoregulation. Enrichments such as hay nets, varying substrates like soil, sand, clay, and sawdust will be provided for Madhubala to dust bathe while the area is secured by elephant-proof fencing.
Madhubala will be carried from the Karachi Zoo to the Safari Park in a huge transport crate. The elephant is currently being trained to enter and exit the crate by herself and sit inside it.
‘Politically motivated’: Pakistan rejects US State Department report on rights abuses
- Annual assessment identified arbitrary detentions, extrajudicial killings, enforced disappearances
- Pakistan government and state agencies deny involvement in missing persons cases, other rights abuses
ISLAMABAD: Pakistan said on Thursday it “categorically” rejected the 2023 country report on human rights practices issued by the US State Department, saying the report was politically motivated, lacking in objective evidence and followed an agenda of “politicization of international human rights.”
The annual human rights assessment released earlier this week identified arbitrary killings, extrajudicial killings, enforced disappearance, torture and “cases of cruel, inhuman, or degrading treatment or punishment by the government or its agents” in Pakistan last year.
The report also said the government “rarely took credible steps” to identify and punish officials who may have committed rights abuses.
“The contents of the report are unfair, based on inaccurate information and are completely divorced from the ground reality,” the Pakistani foreign office said in a statement, adding that the assessment used a “domestic social lens to judge human rights in other countries in a politically biased manner.”
“This year’s report is once again conspicuous by its lack of objectivity and politicization of the international human rights agenda. It clearly demonstrates double standards thus undermining the international human rights discourse.”
The foreign office said it was “deeply concerning” that a report purported to highlight human rights issues around the world was ignoring or downplaying the “most urgent hotspots of gross human rights violations” like Gaza and Kashmir. It also called on the US demonstrate the “requisite moral courage” to speak the truth about all situations and play a constructive role in supporting international efforts to end human rights violations.
“In line with its constitutional framework and democratic ethos, Pakistan remains steadfast in its commitment to strengthen its own human rights framework, constructively engage to promote international human rights agenda, and uphold fairness and objectivity in the international human rights discourse,” the FO added.
Political leaders, rights groups and families of victims have long accused the government, the army and intelligence agencies of being behind cases of arbitrary detentions, extrajudicial killings and enforced disappearances, among other rights abuses. Families say people picked up by security forces on the pretext of fighting militancy or crime often disappear for years, and are sometimes found dead, with no official explanation. Pakistani state agencies deny involvement in such cases.
On Tuesday, Pakistan’s law minister said the government would reconstitute a committee to address enforced disappearances, hours after the release of the US report.
“Now the work is being initiated on this again on the directives of the prime minister. A committee is going to be reconstituted, there will be parliamentary presence in that committee,” Law Minister Azam Nazeer Tarar said.
“There is no lack of seriousness on the government’s part to resolve this issue.”
Pakistani court bars ex-PM Khan, wife from issuing statements against state institutions
- Accountability court directs media personnel to confine reporting to proceedings of the trial only
- Khan widely believed to have fell out with army, leading to ouster from PM office in 2022
ISLAMABAD: A Pakistani accountability court judge recently barred former prime minister Imran Khan and his wife, Bushra Bibi, from issuing “derogatory” or “inflammatory” statements against state institutions and their officials.
Khan, who was PM from 2018-2022, remains jailed in multiple cases, including a 14-year jail sentence for him and his wife for the illegal sale of state gifts. Khan was first imprisoned after being handed a three-year prison sentence in August 2023 by the Election Commission for not declaring assets earned from selling gifts worth more than 140 million rupees ($501,000) in state possession and received during his premiership. In January, Khan and wife Bushra Bibi were handed 14-year jail terms following a separate investigation by the country’s top anti-graft body into the same charges involving state gifts.
Khan blames Pakistan’s powerful military, which has ruled the country directly for over 30 years, for colluding with his rivals to remove him from office via a parliamentary vote in April 2022 and subsequently cracking down on his supporters. The military denies his accusations and has repeatedly said it does not interfere in political matters.
On Friday, accountability court judge Nasir Javed Rana heard Khan’s petition requesting a fair trial. The PTI founder had sought the removal of glass and wooden structures erected at the Central Prison in Rawalpindi, where an appeal against his conviction is being heard. He had also alleged that reporters were not being allowed to attend proceedings, saying that the actions violated the principles of an open trial ordered by the court.
“The accused persons shall refrain from making any political, inflammatory and/or derogatory statements vis-a-vis state institutions and the officials insinuating anything to them,” a copy of the order, seen by Arab News that emerged on Thursday, read.
“The media personnel shall confine their reporting to the proceedings of the trial and shall not publish/report any statements in the trial proceedings, as witness or as counsel,” it added.
Khan’s convictions mean he is banned from holding public office and ruled the 71-year-old out of general elections earlier this year. Arguably Pakistan’s most popular politician, Khan says all cases against him are motivated to keep him out of politics.
Tensions between Khan and the military escalated in May 2023, when angry supporters of his party took to the streets in response to his brief detention, and torched government buildings and ransacked military installations in many parts of the country.
The army cracked down on Khan’s supporters and leaders following the attacks. Khan denied he had incited his supporters to protest violently, saying he was in detention when they erupted.
Pakistan eye comeback against New Zealand in fourth T20I today
- A second-string New Zealand squad beat Pakistan by seven wickets on Sunday in Rawalpindi
- Skipper Babar Azam says pacers Shaheen Shah Afridi, Naseem Shah have ability to make comeback
ISLAMABAD: Pakistan will be eyeing a comeback today, Thursday, in the fourth match of the T20I series against New Zealand in Lahore after suffering a defeat at the hands of a second-string Kiwi squad last week.
Pakistan will head into today’s match against Michael Bracewell’s squad without star batter and wicketkeeper Muhammad Rizwan, who has been pulled from the series after he felt discomfort in his right hamstring.
New Zealand are missing key players including Trent Boult and skipper Kane Williamson as they opted to play in the lucrative Indian Premier League (IPL) while pulled out of the Pakistan series due to injuries.
Despite that, the Kiwis managed to beat Pakistan on Sunday by seven wickets in Rawalpindi, shocking the 2009 T20I world champions on their own turf.
“We did not lose because of any two or three players,” Pakistan captain Babar Azam said at a press conference in Lahore on Wednesday night. “We lost as a team. In the batting, bowling and fielding [areas] we did collapse a little.”
Pakistan’s premium fast bowlers Naseem Shah and Shaheen Shah Afridi failed to impress against New Zealand in the third T20I. However, Azam backed both bowlers, describing them as Pakistan’s “best” bowlers.
“They know how to make a comeback, even if it [bad performance] happens in one game. It is part of life,” he said. “It can’t happen that one person performs every single day.”
The series is an important one for both sides as they gear up for the ICC T20 World Cup 2024 in the West Indies and USA scheduled to be held in June.
The last match of the Pakistan-New Zealand series will be played in Lahore on May 27. Pakistan and New Zealand have both won one match against each other so far, with the first T20I fixture washed away by rain.
The match begins at 7:30 p.m. Pakistan Standard Time.
